Finance – Mortgage

Finance – Mortgage

Finance – Mortgage

Once you have located the property of your dreams you may realise that you have not given sufficient thought to the financial aspects of the purchase or find that the price may require additional financing. Mortgage financing is available in Portugal from various reputable sources, and as elsewhere, can be tailored to suit individual requirements and compared for their competitiveness.

A range of financing options is available for buyers with sufficient income to service a loan. For Portuguese residents, Euro mortgages can be obtained for up to 90% of the property value. For non-residents, mortgages are available in any major currency for up to 75% of the property value or purchase price.

Finance – Mortgage

For Portuguese residents

For buyers living and working in Portugal, mortgages are readily obtainable from Portuguese banks for up to 90% of the property value, subject to income verification. Tax returns are required for this purpose. Loans are variable rate in Euros and from 1 to 3% over the prevailing LISBOR or EURIBOR rate. Portuguese banks will often offer low fixed rate interest repayments for an initial period.

For non-Portuguese residents

For non-residents of most nationalities, mortgage financing is readily available in any major currency from a number of specialist lenders for up to 75% of the property value, subject to income verification.

Income can comprise earned income together with pension, investment or rental income. However, it is not always the case that a lender will consider all sources of income when determining the maximum amount of loan available.

Finance – Mortgage

General

In certain cases, institutions in the buyer’s home country, such as Building Societies may provide finance for the purchase of property in other countries. In general, these require that you are able to finance at least 40 to 50% of the value of the property yourself. For those who are willing to use their own property as security for the loan, virtually no capital at all is required to purchase a property in Portugal.

One should be aware of the fact that your application for finance will result in a variety of “additional” costs that will have to be borne. These range from the cost of a formal survey by the surveyors of the financial institution to whom you have made an application, to the fees for administration of the loan also. In addition there are likely to be a variety of other formalities.